ECONOMIC INDICATORS 1
Economicindicators are statistics used to analyze the future or currentprospects of investment or judge the position and performance of aneconomy. Gross Domestic Product (GDP), unemployment rate and consumerprice index (CPI) are some of the parameters used to measure theeconomic position of a country. This assignment will look at thethree indicators mentioned above to discuss the economy of the UnitedStates.
GrossDomestic Products (GDP)
Grossdomestic product is the blend of gross investment, net exports ofgoods, gross private domestic investment, and personal and governmentexpenditures and consumption. According to the Bureau of EconomicAnalysis, gross domestic product elevated by 1.2% in the secondquarter of 2016. This growth is attributed to increase in consumerspending due to the rise in housing, health care, and utilities andsavings and individual revenue. Personal disposable income increasedby 2.2% in the first quarter followed by 1.2% in the second quarter.
Theunemployment rate remained unchanged at a rate of 4.9%. The number ofunemployed persons remained stagnant at 7.8 million. In July, miningindustries recorded a fall in employment rate, while in the financialsector, health, business, and professional facilities there waspronounced job improvements. Some of the causes of unemployment areworkers preferring contract or part-time working rather thanfull-time jobs fiscal and monetary policy globalization andsourcing automation replacing workers the level of educationdemographic trend and economic circumstances.
Therewere 591,000 hopeless workers. This is because they believe that theycannot find a job. 1.4 million individuals had not sought for a jobbecause of either family or school tasks. In spite of unemploymentrate, there were sectors which recorded jobs gains (Welch &Welch, 2016)
Professionaland business facilities’ employment rose by 37,000, steered bycomputer system design (8,000), engineering and architectural(7,000), technical and management services trended up to 6,000. Infinancial and government sectors, employment increased by 18,000 and38,000 respectively. Over the past one year, health facilities hadincreased to 477,000 jobs. The month of July recorded improvement by43,000 jobs due to growth in residential and nursing facilities,medical services, and hospitals. Leisure and hospitalities haverecorded improved employment rates. Food and drinking facilitiesrecorded 21,000. In total, the month of July in leisure andhospitality noted 45,000 jobs.
Consumerprice index (CPI)
Consumerprice index is an extent of changes in prices of goods and servicespurchased over a period. All items index rose by 0.8%. Index for allother items rose during the period, except food which remainedunchanged and energy which fell by 1.6%. The rise in the all itemsindex is an indication is an indication of an increase in the cost ofliving in the current period.
Sercu,P. (2011). InternationalFinance: Theory into Practice.Princeton: Princeton University Press.
UnitedStates. (2015). Thebudget of the U.S. Government, fiscal year 2016.
Welch,P. J., & Welch, G. F. (2016). Economics:Theory & practice.